The livestock industry faces growing pressures to reduce antibiotic use, particularly the use of medically important drugs for production or performance purposes. In response, the FDA issued its Guidance for Industry 213, which directs companies to remove performance claims from antibiotic labels by December 2016. These impending changes raise questions regarding the potential economic impacts resulting from raising livestock without the use of antibiotics for performance purposes.

To address that issue, the USDA’s Economic Research Service (ERS) recently issued a report titled The Economics of Antibiotic Use in U.S. Livestock Production. This week, ERS Economist Stacy Sneeringer presented a webinar discussing key findings in the report.

Sneeringer began with background on antibiotic use in livestock, explaining there are four categories for how antibiotics are labeled and applied. These are for preventing, controlling and treating disease, with the fourth category for production or performance purposes such as increased daily weight gain. Those performance uses were the focus of the report and the webinar.

Sneeringer noted that in beef production, detailed data on how antibiotics are used is lacking due to the multi-sector nature of the business. Dairies, she added, do not commonly use antibiotics for performance purposes. For these reasons, the webinar focused primarily on hogs and broilers.

Much of the data in the report, she says, came from the ERS Agricultural Resource Management Surveys conducted with broiler producers in 2011 and hog producers in 2009.

In the broiler survey, 48 percent of producers indicated they do not use antibiotics for purposes other than treatment of disease. Twenty percent indicated they use antibiotics for purposes other than disease treatment, which could include production uses, and 32 percent did not know whether antibiotics were used for non-treatment purposes on their operations. This suggests, Sneeringer says, that between 20 and 52 percent of the operations might have used antibiotics for performance purposes.

Among hog nursery operations, 51 percent of producers indicated they do not use antibiotics other than for treatment of disease, 23 percent did use antibiotics for non-treatment purposes and 26 percent did not know.

In hog finishing operations, 38 percent of producers said they use antibiotics only for disease treatment while 40 percent used antibiotics for performance purposes and 22 percent indicated they did not know.

The report’s authors note that few beef-cow-calf operations use antibiotics for production purposes, but those products were fed to an estimated 49 percent of cattle at large-scale feedlots in 2011. In both 1994 and 2011, more than three-quarters of feedlots with at least 1,000 head provided antibiotics in feed or water, where the pur­pose is often growth promotion.

Based on 2006 dairy data, an estimated one-fifth of dairy operations fed antibiotics to replacement heifers for disease prevention. In 2007, 90 percent of dairy operations pro­vided antibiotics for disease prevention.

Sneeringer discussed potential impacts of removing performance uses of antibiotics at the animal level, the farm level and at the market or consumer level.

At the animal level, elimination of production antibiotics would, at least in theory, have these effects:

  • Reduced growth to market weight.
  • Increased feed per unit of gain
  • Increased death loss among young animals. This assumes there is some disease-prevention benefit from antibiotics used for performance.
  • Increased illness in adults for the same reason.
  • Decreased reproductive efficiency.
  • Reduced uniformity in finished weights, or more carcasses at the high or low ends of the range.

Sneeringer notes however, that research shows the extent to which antibiotics benefit production efficiency has declined over time. Before the 1980s, those products improved overall production efficiencies by 10 percent or more. By the early 2000s, that advantage had declined to 1 to 3 percent. The reasons for this trend, she says, include improvements in housing, equipment, biosecurity, other types of disease prevention and overall management, which allow animals to perform closer to their full potential without the use antibiotics for production purposes.

At the farm level, potential economic impacts of removing performance antibiotics could include:

  • Lower overall antibiotic costs.
  • Higher cost for veterinary service and antibiotics for treatment.
  • Higher costs for inputs such as feed, housing and labor.
  • Higher penalties for lightweight or heavyweight carcasses.
  • Reduced economies of scale.

At the market level, the ERS researchers looked at how removal of antibiotics for performance use would affect product price, product quantity and producer revenue. In the economic model, they built in assumptions that only some pork and poultry producers use antibiotics for production purposes, and when they do, the improvement in production efficiency is around 1 to 3 percent.

In their analysis, they estimate that for all producers, the quantity of pork and broilers produced would drop slightly – less than one-half of 1 percent – with removal of antibiotics for production use. Wholesale prices, they estimate, would increase by about three-quarters of one percent. With the slightly higher prices offsetting the small reduction in quantity produced, producers overall would see a slight increase in revenue of less than one-half of one percent.

When the researchers analyzed the effects of removing antibiotics for performance on users of those products versus non-users, the results changed somewhat. Operations that currently use the products would, on average, see that 1 to 3 percent reduction in production efficiency, and the slight improvement in price would not be enough to offset it. So, they would see a small reduction in revenue. Operations that currently do not use antibiotics for production purposes would not see a decline in production or an increase in production costs, and thus their revenues would increase slightly more than those for the overall population.

Read a summary or the full report from ERS.